BP, SOCAR to Ink Caspian Sea Exploration Deal

Posted by Michelle HowardOctober 12, 2017

Azeri state energy company SOCAR plans to sign a production-sharing agreement with BP(BP) to jointly explore prospects in a new block, D-230, in the North Absheron basin of the Caspian Sea before the end of 2017, a source at SOCAR said on Thursday.

BP and SOCAR signed a memorandum of understanding on joint exploration of this block in May 2016 in a move that reflected efforts by SOCAR and foreign companies to make new discoveries in the oil-rich country.

"Participants of the deal will each have 50 percent of shares in the agreement," the source, who did not want to be named, told Reuters.

Block D-230 covers areas in a water depth of up to 300 metres, with a reservoir depth of 3,000-5,000 metres.

BP is a main investor and operator of two major projects in Azerbaijan - the Azeri-Chirag-Guneshli (ACG) oilfields, which account for most of Azerbaijan's output, and the Shah Deniz offshore gas field, which is estimated to contain 1.2-1.5 trillion cubic metres of gas.